It sold 31.1 million iPhones, which was well ahead of analyst expectations of 26 million units sold.

On the earnings call, company executives attributed the strong iPhone number to accelerated iPhone 4 sales.

The success of the iPhone 4 was reflected in the iPhone's average selling price, which dipped to $581 for the quarter. The iPhone 4 is the three year old iPhone that's sold at a discount.

Despite the fall in the ASP, and the success of the iPhone, execs said the iPhone 5 remains the most popular iPhone by far.

The other number of note was iPad units of 14.6 million, which was below expectations, and represented a 14% unit decline. Execs said that if you look at actually sell through on the product, discounting inventory issues, then iPad sales were down 3%. The decline was due to a lack of new iPad in the quarter. The year prior, Apple released the iPad 3, with a Retina display which drove sales.

Overall, revenue was only up 1% for the quarter, and EPS was down 20% on a year-over-year basis.

In the release, CEO Tim Cook said, "We are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014."

Just reading numbers...

iPhone

31.2 million, up 20%. Sequential decrease of 600K in channel. iPhone ahead of our expectations. Growth in developed and emerging markets. iPhone 5 by far most popular. Happy with iPhone 4 and iPhone 4S.

Bill Shope: Concern about high end of the smartphone. Perspective on that?

Tim Cook: Growth point of view, our key catalust will always been new products and new services. In addition to this, we have optty in distribution from carrier relationships to retail, expand indirect channel. Market expansion optty. Enterprise in iPad and iPhone, at front end of that, lots of growth optty.

Don't subscribe to view that higher end is at its peak. I don't believe that, but we'll see and we'll report out results as we go along.

BS follow ... on iPad

Tim Cook: Look at year over year 2.4 million decline, but 1.9 million channel inventory. Reduced by 700k this quarter, year ago was up 1.2 millio, so down 3%. Year ago Retina iPad. So, fromt what Peter and I expected, hit in midpoint of the range we expected. Not a surprise to us. In terms of how other people are doing. What I do know, is that the iPad web share data shows we acclerated further, 85% of web traffic from tablets, absolutely incredble.

We feel really good about where we are. Incredible quarter in U.S. education. Double digit in china... Happy with what we saw.

Toni Sacconaghi: Gross margin bridge...

Peter: Pleased with GM, at high end of the range. Sequential decline not a surprise to us, we understood warranty effects. As I said, expected margins down for 2 reasons, lower sequential revenue. Expected a diff product mix.

TS: Follow ... mix about the same. Was your mix in line?

Peter: We were down 4% y/y on ASP, about $27, due to mix and FX headwinds. iPhone 4 accelerated as we offered more affordable pricing. Down $32 sequentially, mix, iPhone 4, what we may have seen.

Tim: From iPhone point of view, we saw strong sales in emerging markets, India was up over 400%, Philipines up 140%, these were, storng in developed markets, iPhone up 50%, Japan 60%, in some cases iPhone acclerated, an unusual pattern for us.

TS: China? Missing from that list...

Tim: China weaker in the quarter. Data sheet doesnt' tell story. Sell through, with inventory changes, sell through only down 4% from year ago, when you normalize.

Hong Kong down, mainland China up 5%, but lower growth rate. I attribute to many things, including the econmy there doesn't help us or others. In Hong Kng, shopping haven. We saw more dramatic downturn there. Not clear why that occurred. Down on sell thru on 20%, weighed great China.

Ben Reitzes: Trade in program?

BR: How do we turn it around? China?

Tim: Important to put it in perspective. We have a very strong market. $27 billion on a trailing basis, it's a huge, huge business. If you look at iPad sell through up 8%, mainland up 37%, iPad doing remarkably well. Double retail stores over next two years. Lift iPhone and iPad point of sales, both are lower than where we would like them to be. I continue to believe that in arc of time China huge opportunity. I don't discourage over a 90-day cycle.

Gene Munster...

Tim: First time smartphone buyers of iPhone 4 is impressive, we want to attract as many as we can. End of Q2 time frame. We did that on a wider spread basis. iPhone 5 most popular by far, happy to provide product...

More than one tool in the toolbox. It's a great way for a buyer to get into the iOS ecosystem.

Munster: Growth, revenue growth? Are there product cat big enough?

Question on Russia

Russia: 80% are in retail outside of carrier owned stores. We sell through chains. iPhone activations last quarter were highest ever. Happy how we're doing there. Contribution much less than retail organizations, not well understood there. Looking for other relationships and to add and enhace.

Question on ASPs

Tim: We don't project on ASP. Look under iPhone numbers, we saw significant growth in lower price point y/y, which is iPhone 4. And that was one of the things and the iPhone 5 doing well that allowed us to beat vast majority of expectations out there for iPhone sells. Mix changed, has changed across last year. Look at 3GS which was in comp position, 4 doing better. Better dist in diff countries. Product has highest mix in first few months of sales. Happens on iPhone, iPad, on Mac, i don't see anythign that fundamentally would change that. We're going to look at this quarter by quarter.

Question on GM...

Tavis McCourt: Share buyback?

Peter: Ending share count ... all that on income statement. Ending basic and diluted.

During June quarter, we concluded $2 billion ASR program. Final shares in on that. Second ASR of $12 billion started at end of April. Fiscal 14 that will close. Bought $4 billion on open market, about 9 million shares. Impact, 22.9 million shares. Into Sep quarter, we would expect to see 11 million share benefit.

TM: iOS in car manufactures? Liscence, strategy...

Tim: See it as very important, part of the ecosystem. Just like App Store, iTunes, content key, and services we provide, having something in the automobile something important. Apple can do this in a unique way, better than everyone else. Key focus for us.